Ted Simons:
Hello, and welcome to "Horizon." I'm Ted Simons. For six years, Arizona governor Janet Napolitano has been at the helm of the state. She is expected to leave her current job, possibly by next week. The Governor has been named by President-Elect Barack Obama as Homeland Security Secretary. She still awaits Senate confirmation. The Governor leaves a state that has turned a deeper shade of red; not only politically, but fiscally as well. Next week, she plans to give her final State of the State address. Here now is governor Napolitano. And it’s good to see you again, this could be our last discussion for a while.

Janet Napolitano:
It might be, and certainly the last one with this title.

Ted Simons:
That’s true. Well, thank you for being here. It's good to see you again. Are you ready for what lies ahead?

Janet Napolitano:
Well, I’m preparing. And it's been a busy time since the election, since President-Elect Obama announced his intention to nominate me, so I've been being briefed and studying up on the new role I would occupy, but finishing up things here. Managing the closeout of this administration. Working with Secretary of State Brewer on the transition.

Ted Simons:
Why did you take the job?

Janet Napolitano:
It was a hard choice. Obviously, I loved being the Governor and I know the dislocation in the middle of the term that this causes, but Homeland Security is such a hugely important area for Arizona, for the country. Many of the issues I have direct experience with: disaster response and recovery, immigration, border enforcement and the like. Some, of course, are new. That department is in such infancy that there's a real opportunity to build something special there. And also when the President-Elect calls and says I would like you to serve and I would like you to serve in this capacity, I think there's an obligation to answer in the affirmative.

Ted Simons:
And yet, some see that particular position as a thankless job. There's so many agencies you're overseeing and when things are going well, no one wants to talk about you. It's only when things are going wrong.

Janet Napolitano:
Well, there is that. Although, there have only been two secretaries before me. So again, we're talking about a really new Institution, and one of the things I want to do as Secretary is now building on what has started. But create a unified vision for this department, and lay out some standards; principles that will guide all of the operating components, from the Secret Service and the Coast Guard to Immigration and Customs Enforcement.

Ted Simons:
From what you’ve seen so far, is it too big?

Janet Napolitano:
I think it’s big, it's the third largest department of the government. It's over 200,000 employees, it’s a $50 billion-plus annual budget. I hope to bring experience I’ve Had in Arizona in terms of management and leadership to help guide the department.

Ted Simons:
As far as your experience here in Arizona, obviously, border state and border issues -- how will you being in that position affect border policy here in Arizona?

Janet Napolitano:
One of the things I will do, iss based on my own experience, I Know what to ask and what to Count and what really matters in Terms of effective law Enforcement at the border. I know that we need to work and Develop a system that includes States and locals in the right Way, that uses different Methodologies and boots on the Ground and technology at the Border. I think I understand The ebb and flow, particularly on the Southwest border. On the other hand, I don't know much about the northern border. One of the first site visits I will do is heading up there, because while from an immigration standpoint they have nowhere near the numbers the southern border does, from a terrorism type of standpoint there are risks up there that we need to be very cognizant of.

Ted Simons:
As far as border patrol agents, boots on the ground at the border here, do you see yourself getting more folks down there? Fewer folks down there?

Janet Napolitano:
I see us continuing to build and support the border patrol, but you're never going to have enough boots on the ground, if all you're going to rely on is that. You've got to augment them with technology. And then at some point, we need to revisit the issue of the National Guard and its role at the border, and that's certainly something that I’ll want to take up with the Secretary of Defense.

Ted Simons:
As far as additional fencing, can it work?

Janet Napolitano:
You know, fencing is part of an overall strategy, accompanied by boots on the ground, meaning men and women who are actually physically located there, and technology. There's a role for it, but the notion you're going to solve our nation's immigration woes by building a fence from San Diego To Brownsville, for anyone who knows how it works and what the “bad guys” want to do, understand that's a hugely expensive effort that by itself will not deal with the immigration issue.

Ted Simons:
You mentioned technology. I know that high-tech security, it’s a great idea, lots of folks seem to think it’s a wonderful idea. And yet we have this Project 28, which I still don't know if that's ever going to be what it's supposed to be. Can high tech security at the border deliver?

Janet Napolitano:
I think it can. You're right, the initial Project has had a slow start but it is well under way now. I think it's better incorporated with what the border patrol really needs, but we also have increasing use of ground sensors and other types of technology that can also help us detect when there’s been illegal entry into the United States.

Ted Simons:
As governor, you've often been critical of the federal government not reimbursing statements for the cost of illegal immigration enforcement.

Janet Napolitano:
I sent them a bill!

Ted Simons:
Yes, you have, numerous times. You are now on the other side of the fence, as it were. Talk about the dynamics. Are you going to see things differently? Are you going to push for things that weren't pushed for before?

Janet Napolitano:
I think I’ll bring to all the deliberations within the Obama administration my personal experience and what I know happens in a state like ours where you have a $500 million debit to the federal government for the cost of incarcerating illegal immigrants. That $500 million would come in handy right about now.

Ted Simons:
I was going to say, if someone here sends a request, you'll receive the request, and...?

Janet Napolitano:
I’ll probably forward it to the attorney general. I sent my bill to the Attorney General. That particular issue is a Justice Department issue but I think more importantly, kind of the facetiousness aside, we’ve got to have an immigration system that’s enforced, that’s fair, that’s firm, and that’s more than a short term surge, that’s a real system we're going to support long term.

Ted Simons:
Closer to home. Democrats, as you well know, not entirely pleased with your move. What are you telling them when they’re asking you why you're doing this and what do they do now?

Janet Napolitano:
Well, there are a few that are unhappy. It's really relatively minor and I remind them this is President Obama who has asked me. And what I say is, keep putting out the Democratic vision for Arizona, and remember: although in the legislature we didn’t pick up seats, we actually have over time picked up seats there. And look at the Congressional delegation. Five of the eight members are Democratic. Two of the last three Corporation Commission seats went Democratic. From that standpoint, 2010 is right around the corner and don’t lose sight of the progress we’ve made. Don't lose heart. Keep fighting.

Ted Simons:
But many democrats saw you as a goalie there, blocking an awful lot of shots from lawmakers from the Republican side. What advice do you give them to have similar relevance from the Democratic viewpoint now that you’re gone?

Janet Napolitano:
In the end, part of it will depend on how Governor-to-be Brewer governs. When I -- as governor, I had a large contingent of Republicans in my administration, in the cabinet. I think in 2006, it was almost 50-50, because I recognize that no political party in this state or indeed, in this country, has a monopoly on good ideas. You want the best people with the best ideas who are willing to work hard and reach out to the other side. The legislature, unfortunately, has gotten hyperpartisan over the years and remains so. I don't know if they can get to 31-16 in either house so at some point, they may have to reach across the aisle. But the democrats should continue to put forth their vision, their alternatives. They should point out where extremes are being reached and why they are unnecessary extremes. There's a very important voice they have, and they represent by registration almost as many people as the Republicans do. So it will behoove everybody to recognize that Arizona is very much a state that's in the middle.

Ted Simons:
You mentioned Secretary of State Jan Brewer, and we had her on the program last night. I asked her if she felt some obligation to continue at least some of the policies, a little of the mindset of a governor who was elected by a considerable margin. She said no, not necessarily. Do you agree with that? Do you agree that if a governor is elected and doesn’t fulfill the term, that a Secretary of State who comes in has some kind of obligation to continue?

Janet Napolitano:
I think she will find her own way as governor. And she will find that it's a different job than being in the legislature or certainly than being Secretary of State and she’s going to have to find her own way, her own vision. She's certainly not obligated to follow what I’ve done. I wouldn’t expect her to in that fashion. I think she will be very aware of the fact that she was not elected to be governor and that I was, by a substantial margin, and I think that will not be something that goes unnoticed.

Ted Simons:
To that end, are you concerned that some of the things you've worked on for years now could be cut and cut relatively quickly, or scaled back, with the incoming Brewer administration and the upcoming legislature?

Janet Napolitano:
Well, I am, but again, I think things we've worked on like improving education, supporting institutions like all-day Kindergarten, supporting the Universities, those are things with broad, broad public support and are necessary not just Democrats in Arizona, but for all of Arizona. I hope that guides future decisions of the governor and the legislature, and if it doesn’t, then the Democrats need to be pointing that out by the 2010 elections.

Ted Simons:
But you personally: if something like all-day Kindergarten winds up getting scuttled, something along those lines. If the Western Climate Initiative winds up on the back burner, if any burner at all: will you personally have a feeling of regret that you A) couldn't get those through, or couldn’t keep those or B) that you left when those things were vulnerable.

Janet Napolitano:
These are hard choices, and it was a hard choice to leave. But in two years, I would be leaving in any event and the same kinds of things could happen. So the beginning of the Obama administration is now the call to service, is now the office I’ve been asked to serve. It’s a huge national responsibility that I think will be challenging and that I look forward to. There are a lot more people working on those issues than just me in Arizona and I’m turning it over to them and saying now it’s your turn.

Ted Simons:
And to that end, last question on this particular angle, there are some who are saying you’re abandoning ship in rough waters. Times are tough and she's getting out of here. How do you respond?

Janet Napolitano:
I took the governorship with a deficit. I was hoping not to hand it over with a deficit. But the national economy just overtook us. But I will leave this state with a plan for 2009. I was hoping the legislature would address it in special session, they couldn't muster the Republican votes to do that. But now they'll have the chance in January. And I will also leave a 2010 budget plan, because I think it's important to know there are ways to get at this budget deficit that protect education and the vital things we have been investing in. We may have to cut back on some of those. I understand we may not be able to fund everything 100%. In this kind of deficit, we will be having to make cuts and slowing down some things, even If I were here. But we're not going to balance the budget in Arizona just by cuts and the more and more people who study the budget and understand what little we do pay for in Arizona, we're a lean State, understanding that.

Ted Simons: Are these the things you'll be talking about in the state of the state address?

Janet Napolitano: Some. It will be shorter. I'm required to give it by law. Why are you doing that? You're getting to go? One of the reasons is because the law says. And the other reason is I would like to leave one last word with the people of Arizona. Reminding people of some of the Broad strokes we've accomplished and where we need to go. I'll have a few points -- Particular points but it won't be a long layout of a Legislative addresses.

Ted Simons: And yet a lot of republicans are saying first, why bother with the speech? But secondly, why did you not Resign, now or a week or two ago so they could get started on the Incoming governor with the Serious budget problem.

Janet Napolitano: Well, they have lots of Opportunities to get started on that. And -- the point is I’m the Governor until I’m on another Job and I will carry out those Responsibilities to the best of my ability. Until I’m confirmed.

Ted Simons: For those who say why should we work with you when you're not going to be here, you would say?

Janet Napolitano: That’s a missed opportunity. There was an opportunity to have a special session. Indeed, we have had a leadership Agreement on changes for 2009. They just couldn't get enough Members to come back in December to vote it. That's fine. We've essentially implemented those changes anyway. They can ratify those when they come back in regular session. And on we go. But this is one of those times Where everybody is required to Think about roles and Responsibilities, understand That I’m the governor unless and Until I’m confirmed as the Secretary. I've called to national service. I'll do that, but the life of the state goes on.

Ted Simons: Do you think there was a Delay as far as the special Session was concerned from folks Who are just waiting for you to Leave?

Janet Napolitano: Perhaps, I think you have to recognize there was a change of Leadership in the house as well. We're going from one speaker to another and I think that probably caused some disruption.

Ted Simons: The treasurer has said we may have to borrow from banks in the Next couple of months because we’re running out of money. I know that you don't necessarily agree. Why is he wrong?

Janet Napolitano: Well, he's not necessarily wrong. If you assume the legislature is not going to act on anything for the next two months and the Federal government is not going to act on anything for the next Two months and that we have done nothing to control spending, which we have. Then under that scenario, he's technically correct. But that's not the same as having a plan for how you fix Things, and so what I’ve been focused on is what we do to Control spending now, which we’ve done. How we lay out a plan for the 2010 budget. The senate president has said there’s not going to be any Business until they deal with the budget and there's time to do that. And we had a little -- you know, The treasurer called this Emergency session today and Without any notice, and I was There and said, Mr. Treasurer, The decisions you want to make In public are decisions, a, that Should be decided in executive Sessions with options decided And analyzed, as opposed to a Spur of a moment thing, press Conference. But the number one work needs to be done at the legislative Session, at the actual budget, not on a sideshow that the Treasurer wants to have.

Ted Simons: And yet he says he wants to negotiate with banks for credit now to prepare for what's coming up next. Why is that wrong?

Janet Napolitano: Because it shows Inexperience. You don't know what ultimately -- whether you're going to have to negotiate at All and you certainly don't want to telegraph what your interest Rate negotiating position is going to be before you've even been in a meeting with a bank. And you don't want to do it 45 days ahead of time when you don't know what the national Market is going to provide. Again, I think it was premature. I think that the legislature Needs to act, get at it. I wish they had done it in Special, but they have time and they should take it and act as quickly as they can. But they need to make good Decisions and shouldn't let those kind of outside things Force them into bad decisions. They should really be thinking Long term about what's good for Arizona. They should be thinking about the fact that as the economy Comes back, we're going to need A good workforce. We're going to have to be diversified so we're not so dependent on the housing bubble. We need the things that really will support a young and growing State moving forward. Those are the things that need to be the focus right now.

Ted Simons: You mentioned when the Economy comes back. We had secretary of state brewer on last night and she said it Seemed to your administration was accepting unrealistic Revenue projections. Is that valid?

Janet Napolitano: I don't think so. I think for 2009 we were dealing with the same numbers as the Legislature. Just think how much the economy has changed in the last 90 days. So the whole revenue forecast World is all over the map. You have to build in triggers and other things to deal with it.

Ted Simons: And she was saying that some of those decisions with based on what she described as wishful thinking --

Janet Napolitano: I haven't put out a 2010 Budget and I think that's kind Of loose talk on her part.

Ted Simons: In previous years, though?

Janet Napolitano: If you look at this year's Budget, there was a republican Budget they couldn't get the Vote for but if you compare it To the budget that passed, they Used basically the same revenue Projections, it was only on the Spending side there were Differences.

Ted Simons: Why are we in such bad Straits?

Janet Napolitano: I think the number one reason is the national economy stopped. Nevada, California, Arizona, you Go across the United States, Every state is confronting the same thing. If you read the "the New York Times" today, the governor of New York gave his state of the State yesterday and laid out What two years ago would have Been an unforeseeable scenario. And even a year ago. The national economy went down. The state is not immune. We fully predicted there will be Assistance at the federal level and that will come sooner rather Than later. But again, Arizona is not an Island, particularly when it Bases its economy on housing. And this all began with housing.

Ted Simons: Enough assistance to make a significant difference?

Janet Napolitano: It looks that way, yes.

Ted Simons: You see yourself returning to Arizona?

Janet Napolitano: You know, I love Arizona, It's my home. I'm going to keep my home here. So at some point, yes, I would like to be able to return. Doing what? I can't say. I can't predict but I’m a Southwestern. I've lived in the west my entire Life. I'll be back.

Ted Simons: So could we say in some part this change was you going from the elected office world to the Administrative world for a While?

Janet Napolitano: I think that's so. I mean, going to the national Executive branch. With a big challenging time and a big challenging job, and I have really devoted my adult Life to public service and I Can't think of a bigger task to Be asked to perform.

Ted Simons: So then could we wonder if You would go from administrative Back to elective; say, a run for The united states senate in the Future?

Janet Napolitano: You know, I don't speculate. I take one job as it comes and Focus on that and try to do the Best I can.

Ted Simons: Proudest achievement as Governor and the biggest Disappointment while you were in Office? Got a minute.

Janet Napolitano: Biggest disappointment was not getting transportation through the legislature or on the ballot and trust land reform Completed. We were so close and I still regret the Supreme Court keeping those from the ballot. I disagree with what they did there. Proudest achievement, I think we’ve made good strides in Education and set the marker down about what a priority has to be for this state.

Ted Simons: With that, we have to wonder If cuts again come to education, Is that something that, again, It's going to be difficult for You to see from a distance, the Things you think are proud Achievements get chopped.

Janet Napolitano: The next president can take Things the current president did and change those. That's what happens, but I think what we've demonstrated over Time, a continued and sustained Commitment to education is a key Function of state government. It's one that Arizonans and both Parties believe in and stand us well for the future.

Ted Simons: Thank you so much for joining us and good luck in Washington.